PENN Entertainment Inc (PENN) 2005 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to Penn National Gaming Fourth Quarter Earnings Results Conference Call.

[OPERATOR INSTRUCTIONS]

As a reminder, this conference is being recorded on Wednesday, February 15, 2006. I would now turn the conference over to Mr. Joe Jaffoni, Investor Relations. Please go ahead, sir.

Thanks, George. And good morning, everyone, and thank you for joining Penn National's 2005 fourth-quarter conference call. We'll get to management's presentations and comments momentarily as well as your Q&A, but first I will read the Safe Harbor disclosure.

In addition to the historical facts or statements of current conditions, today's conference call contains forward-looking statements that involve risks and uncertainties within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations and beliefs, but are not guarantees of future performance. As such, actual results may vary materially from expectations.

The risks and uncertainties associated with the forward-looking statements are described in today's news announcement and in the Company's filings with the Securities and Exchange Commission, including the Company's reports on Forms 10-K and 10-Q. Penn National assumes no obligation to publicly update or revise any forward-looking statements.

Today's call and webcast may include non-GAAP financial measures within the meaning of SEC Regulation G. When acquired, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in today's press release, as well as on the Company's website.

With that, we will get to the heart of the call and I'll turn the call over to Penn National's Chairman and CEO, Peter Carlino. Peter?

Thanks, Joe. Good morning, everyone, and welcome to our fourth-quarter call summary. It is a spectacular day here in Pennsylvania. I must confess I don't like it much below 70 degrees, but it's sunny and beautiful and not a bad day to be here in Wyomissing. With me, as always, is a pretty representative portion of our team, Kevin DeSanctis, Bill Clifford, Len DeAngelo, Jordan Savitch, Robert Ippolito and Steve Snyder. Again, we are all here to try to give you as complete a picture as we possibly can of the business of the Company.

We are, in my judgment, winding up a tremendous year in 2005, just a spectacular year in every respect despite, frankly, a whole series of challenges that we faced that you are well aware of. Certainly, the Gulf Coast issues, and we'll talk about those, the challenge of completing our Argosy closing, and a whole host of things that we recognized leave a lot of fog or confusion around the business of the Company and where we're going. And hopefully, we can clear up a lot of that fog today. That's clearly my goal.

First and foremost, we'll roll the various issues, and then of course, take the bulk of our time with your questions. Pennsylvania, we'll talk about it. Clearly, that has been a bit of a disappointment for us, though it is moving along. It's pretty clear to me that the state is serious about doing the right thing and pursuing the right ethical approach to this. We have scheduled the very first of our public presentations, now, at the Gaming Commission.

And I think we're on for March or early March for -- early April, for our first public presentation and for public comments. And we remain optimistic, though disappointed that the process is a whole lot slower than we wish it would be. But it moves on. As we've mentioned in our press release -- and by the way, I want to comment and publicly thank Bill and his team for the tremendous job I think he did in organizing one of the most complex press releases that we've ever issued, giving as much transparency information and visibility as we possibly could.

I won't repeat a lot of the detail there. It tells you, I think, quite plainly what we're going to do and where we're going to do it and when we're going to do it. So it's there. But in Pennsylvania, we are moving along. We are excited about the opportunity. We had said that somewhere through roughly the middle of this year, we expect, we can raise the Penn National Race Track, though I want to point out continue live racing in our new temporary facility that is just being finished today, and look forward to our license and the ability to build this spectacular new facility in Central Pennsylvania.

We'll spend a little bit of time talking about Illinois. Kevin was there yesterday, and I'll ask him to say a few words about that. Maine moves on. Our operation in Maine is off to a good start, a solid start. We -- I'd remind everyone that our -- despite what you read sometime in the Portland press, our effort to build a facility just off from the Bass Park site, to which we are contractually entitled, has been really an effort to work with the City of Bangor and creating a location and a site that's best for them.

We are ready to go tomorrow at Bass Park, but the challenge has been that they realize that they have other needs for that site, other public events they hold, and have asked us to work for them, and we do. That's really the only reason for our delay in going straight ahead and opening a new facility in Maine. But we are up and running, we're working on the issue of trying to get the appropriate place to be, and we're pleased to be there.

In the Gulf Coast, I'm not going to repeat what has been so ably summarized in our press release, but we have taken some time to think clearly through the issues, the challenges, and so forth in each of those two properties. I think we're satisfied, as a company, we know the right answer. The reconstruction process is underway in both cases. And late this year, we would hope to be up and running again in both of those locations.

With respect to Illinois, Kevin, why don't you take that?

Okay.

And talk a little bit about yesterday.

Basically, yesterday was our initial consideration for an extension of time to the order that we divest both the Argosy, Joliet and Alton properties. We requested two years to tacked on to the December 31, '06 deadline for us getting to definitive sales agreements.

We do not expect to hear anything until the March 6th meeting. On March 6th, the Board should decide on whether or not to grant our expansion. I think the meeting yesterday was cordial. I think that the Board is looking at this very objectively. And on March 6, I believe there will be two senators there to speak on behalf of the extension. So I think until then, it's probably just a wait-and-see type of situation.

Thanks, Kevin. Let me summarize, before we go to questions and answers, and tell you that the Argosy transaction and integration has gone very well. We're very, very pleased. Obviously, we love the property. We even heard a lot of just tremendous people, all of them, senior staff, have been together with us here in Pennsylvania. And we are just off to a tremendous start. So I could not be more happy about the way the whole Argosy transaction has gone.

Finally, I want to say that despite what I described earlier as a lot of fog, the company remains very, very focused and very systematic and very patient on every one of these issues. And I also would say no less motivated to continue to build and develop this company than we were, frankly, a decade ago. This is actually a very good time for Penn. We feel good about where we are. There are challenges, but that business is challenge and that's pretty much the way we approach it. So, with that, operator, we will take questions. I left a major part of this out. Let me -- Bill, my apologies.

That's all right.

One of the things we did want to do was to have Bill highlight some of the financial issues that you should know about.

Yes. Thanks, Peter. I think what I would like to just point people to is really what's in page six of our press release, which are some of the key points of what's in our guidance and what's not in our guidance. Clearly relative to Bay St. Louis and Boomtown, we expect the property to be open in the fourth quarter, but we have not included any operating results in our guidance going forward. So that would clearly be a conservative outlook, and the exact timing of when that will open is not 100% clear today.

We're going to be receiving business interruption proceeds from both Boomtown and Bay St. Louis. We don't know if that will get resolved this year or not. We would expect that we'll continue to be having negotiations with insurance companies. I think they are going reasonably well, as [we] expected. I don't see necessarily any huge issues of concern there, but we don't know when that's going to get resolved and it's a very complex and difficult series of agreements in terms of the scope of damages and exactly how much those proceeds will be and we'll again, get those resolved either towards the end of this year or potentially could end up in next year.

Obviously, Kevin touched on what's happening in Illinois. And for purposes of our guidance, we have included both of those properties in continuing operations. And we've also outlined within the press release what our expected results -- what the relative contributions of both of those properties are to our results, not only for the quarter, but for the year. And the reason we have done that is, we can then allow you guys to understand what's in our guidance, what those two properties represent and you can obviously make your own judgments about whether those are continuing or non-continuing operations.

Lastly, Casino Rouge, I think, has been -- has done exceptionally well. As you see by the fourth quarter with an EBITDA of roughly $20 million in the quarter. We are obviously challenged as well as everybody else is with exactly understanding what's going to happen in the outgoing quarters. We're seeing very strong results in the first quarter, which [will] reflect in our guidance.

And for the year, our Casino Rouge results are really based on last year's run rate -- not run rate, I am sorry, last year's actual results which is roughly around $53 million of EBITDA. It's what's included in our guidance going forward for Rouge. And the market can then make an evaluation of where they think that property is going to end up. I think that touches on the major points in the guidance that I want to make sure everybody is clear on.

And Bill while you're at Casino Rouge, one of the things that we talked about earlier this morning was the fact that, one of the largest charges that we took last year related to the settlement of litigation down at Casino Rouge. Go ahead.

Yes. I am sorry. Well, we back that -- we treated that as an adjustment to EBITDA, that settlement charge.

No, I understand, but the point that I was going to make just for fun. You get a break every now and then.

Right.

Buying that property turned out to be as opposed to paying a flexible rent [tied] to revenues, turned out to be a pretty timely thing to do. So we caught one break last year that we kind of liked.

Yes, you do get lucky every once in awhile.

So with that, operator, we are open for questions.

[OPERATOR INSTRUCTIONS]

Our first question comes from the line of Larry Klatzkin with Jeffries and Company. Please proceed with your question.

Good morning, guys. Good results.

Thanks, Larry.

Bill, that was one of the better press releases I have seen. Thank you. A couple of questions, one, just a housekeeping, cash and debt at the end of the year?

Yes, the -- our cash on hand at 12/31 was 132.6 million. Our senior credit facility was 2.149 billion, capital leases was roughly 20 million. And our bonds were 625 million for a total debt of 2,793.6 [million].

Perfect. Corporate expense going forward, you have a lot of things in the corporate expense for last year, what should we be looking for kind of on an ongoing basis here next year?

We are looking around 45. That does not include stock option expense.

Okay. And then as far as CapEx timing, you are doing a lot, how should we time that?

Timing, I am not sure we are really going to give timing. We clearly are challenged enough just to get CapEx total numbers correct, and there is a lot of issues there. I think I will give you -- what we will give you is first quarter and full year CapEx. And I might as well -- I'm sure you'll be asking this question in a minute anyway, I will give you just also our fourth quarter capital expenditures.

Fourth quarter capital expenditures were $118 million, broken down between maintenance CapEx of roughly 24.7 million and project CapEx of roughly 23 -- or 93.3, I am sorry, 93.3. And that includes roughly $40 million for Bangor as our delayed purchase price.

Going forward, first quarter CapEx breaks out to 40.3 million and project CapEx 20.7 million and maintenance CapEx for a total of 60 -- it was 61 million. For the full year, we are looking at project CapEx of 273.3 million, maintenance CapEx of 63 million, for a total of 336.3 million.

Okay. Thank you on that. Question, Pennsylvania, so you are not doing it temporary, do you think you will be open by, would you say, mid '07 that we should probably assume?

Larry, you know as much about that now as we do, quite honestly. I turn my computer on and find what's going on, talk to our government affairs people. Look, the process is very slow, so we're not making any predictions about when that's going to happen, except to say that our temporary facility will shortly be complete. We have a significant structure that will house essentially our racing operations, imagine a very wide simulcast operation. And at some point, mid year, we're going to take the track down, get a head start, clear the ground, be ready to go. Plans and designs are in the very later stages of completion, so we know where we're going to be. And wait to see when we can get a license and get started.

But you wont do a temporary slot machines?

No. At the moment, we're not planning to do that. Again, we need to hear a little bit more from the commission, get a better sense of what they are thinking. It's not impossible that we can install some slots earlier, but we don't even know what the nature of the temporary license is going to be yet. So, and there has been no public pronouncement about that. So that we remain flexible, we've got space and some availability, and we're just going to wait and see.

Okay. Now guidance --

You know, Kevin -- we were talking earlier in this meeting. Kevin had made the point and we need to make a view that we view this as a marathon. This is a long-term race. We all live and die quarter-to-quarter, understand that. But when you're planning from our end, there is a whole series of things that we work on, as you well know, that are -- that unfold overtime. And once again, we kind of urge patience and just know that we're prepared, we're ready, and we just got to play this one out.

Now your guidance does not include anything from Mississippi. Obviously -- you're planning early or late fourth quarter, could we get a real chunk of your earnings that's not in your guidance for those two properties given what [Al's] producing?

Well, I mean, clearly, there are two issues there. One is the exact timing of when the property will open, and then what the market is going to look like at the time we do open. Both of those are a little bit difficult to foresee. If today, certainly as we get closer to the fourth quarter, I think we'll get a lot more comfortable with what's going on in the market and what the relative capacity levels are, et cetera. I would expect that this is something that you should see earlier in the fourth quarter than later, but midpoint probably is a fair -- that way you are half right or half wrong.

Okay. The only other thing it's going to open up is Beau Rivage it looks it. I mean the capacity we see now is what it is, except for the Beau Rivage, right?

That's my understanding as well, but certainly Beau Rivage has a significant amount of capacity.

Sure. True because I talked to Hard Rock yesterday, they are not even started breaking ground yet. Last question, I'm sorry to take up so much, table games in West Virginia. I know there's a push going on right now.

Who wants to take that?

Larry, we continue to believe there's a low probability of that happening.

All right. Thanks Kevin. I appreciate it. Good results, guys.

Thank you.

Our next question comes from the line of [Joe Hudack] with Wachovia Securities. Please proceed with your question.

Larry already took care of everything. But nice quarter, guys.

Thanks, Joe.

Our next question comes from the line of Ryan Worst with Brean Murray. Please proceed with your question.

Good morning, guys. Just a couple of follow-up questions. On your guidance, it looks like, obviously, this first quarter is very strong and you said what you thought Baton Rouge would do for the rest of the year. But is there anything else in your guidance, I mean, it looks a little conservative in the outer quarters, is there anything like construction disruption at Charles Town or Lawrenceburg that we should be aware of?

No, I don't think so. I think what we are looking at is -- we certainly haven't factored in any major components. Certainly, Charles Town is under construction, and certainly it is a bit of -- a little bit of a challenge on the parking situation. We've taken out a few spots until the parking garages gets back up -- the new parking garage is open. But I think -- I don't think we're expecting massive disruption from that.

No. I think what you're going to see actually is improvement because the garage will be open. You can say we'll be finished, and so we're actually trending in a better way. At Lawrenceburg, as I think was well described in the press release, we're committed to the expansion there. It's very exciting. However, there are just procedural processes that we don't control. The Army Corps of Engineers is supervising archeological work in that area, that is part of the process. Its been going a little slower than I think the Argosy folks thought, and we now recognize we can't control that. It's moving along. When it gets completed, we'll proceed with the project. But again, it's somewhat indefinite.

Yes. I'd just like to add one comment. I think, when you look at our guidance, generally, it's not priced to perfection, which I think is our view on the world. There is always pluses and minuses to it as we go forward, but I think Bill and his team have done a pretty good job in making sure at the end of the quarter or at the end of the year, we're very close to where we thought we'd be. Never exact, but pretty close. So I think you're right. It's not priced to perfection, but there's always surprises along the way, as a rule we don't really like surprises.

Right. And just a little follow-up, Kevin. Obviously, January was off to a very strong start. Are your seeing that taper off a bit, because I guess, weather comparisons or any other reason?

January was, I think, a very good month across the country when you look at all the different markets.

Yes.

We're not really sure why that was. But I think, yes, we're probably settling into a more normalized February, about where we expected it to be.

Okay. And then, maybe can you go over some of the reasons why you want to delay the deadline in Illinois?

Well, the first reason is -- we gave about a four-minute presentation yesterday, and I won't do that here. But basically, there is two fundamental reasons why we think this is not the most opportune time to divest assets in Illinois. There's three pieces of legislation that we think are pretty harmful. One is, House Bill 1920 which basically outlaws riverboat gaming on July 1, 2007. We think generally its difficult to try to sell an asset when there is not going to be any gaming there within a year. So we explained that to the Board and we think that that is something that we would be concerned about.

Second, another piece of legislation was proposed to tax the Joliet boats exclusively for $1.5 million, each to fund a civic center, which again has a tendency to depress valuation. And third, there has been a proposed smoking ban in Illinois, which we said yesterday, while it may be good public policy, the reality is that will also have a tendency to depress valuation. When you take those three together on a cumulative basis, this is something that would really have a very significant impact on sales price, and I believe, would penalize our shareholders in just a terrible manner. And there is no reason to do that. We have been a great licensee.

And frankly, when they look at the way we are approaching our businesses there, all of their concerns about an undue influence from an economic perspective, we believe is not warranted. Having said all that, if we can get past all these pieces of legislation, and the primary one is 1920. Now that can die in committee, and that would be dying in committee either at the end of this legislative session or further on into '07. That would give us at least a window to take that out of the picture from an excuse standpoint, because we did press the point that any potential buyer coming in here is going to use all these excuses to depress price. That's one piece of it.

The second is frankly, the way the industry has turned. There has been a lot of consolidation. And in addition to that, there is this view of the Board in Illinois that they don't want more than an undue concentration of owners in the Chicagoland market. Basically one of the concerns was that we would own two of the four boats in the Chicagoland market. Well, that immediately eliminates some of the largest potential buyers in the industry. And so, your pool of qualified buyers is somewhat limited. And that's going to create pressure on a financing perspective, if you will, and on -- and frankly, the ability of some of the smaller companies to come up with the amount of equity that's going to be needed to complete this transaction.

So we think those two things together, just create a very unfavorable environment for us to divest the assets and that was our primary reasoning. So as this unfolds, we think time can cure a lot of these things, and that was basically our pitch to the Board. The Board seemed to react somewhat favorably. They had -- their concern was primarily around making sure that we would not -- we would maintain these assets in the same condition in which they have been maintained by Argosy. And I think we presented a pretty compelling case, which we're going to follow-up with other information that obviously that would not be our intention.

Okay. Great. Thanks a lot. Good quarter, guys.

Our next question comes from the line of Dennis Forst with KeyBanc. Please proceed with your question.

Yes, I had a couple. First of all, Bill, what was capped interest in the fourth quarter?

Capitalized interest --

And for the year?

It's here somewhere. Hang on a second. Capitalized interest in the quarter was 874,000. For the year, it was a 1.4 million.

Okay. That's good enough. And the depreciation figures used for the fourth quarter, is that a pretty good run rate for us to use going forward, at least through this year?

Yes. Well, you have to put in perspective, fourth quarter is good, as a result of the Mississippi properties being closed. Obviously there is no depreciation in that in the fourth quarter for those properties. So when those come back on line, you have to add that back as well.

Sure. Okay. And then pre-opening, I saw the Bangor number. Was there any other pre-opening in the quarter?

Pre-opening. We cannot -- get too worked up on the pre-opening numbers.

Yes.

I suppose we should, and other companies do.

No, I like it this way.

The reality is, certainly, we have added some staff at Penn National in anticipation of getting gaming there. We have got a new GM, and we have brought on a new CFO and variety of other positions at the property that are incremental. And -- but I don't know that we would necessarily want to characterize those as pre-opening expenses.

Okay. And then, the last question was about Casino Rouge. The State releases the gaming win obviously, and it was $34 million in the quarter and your total revenues were 45 million. Usually there is a much closer comparison between your revenues and the State's gaming revenues. This time, there was like a $11 million difference. Can you explain that?

I wasn't aware the State came out with that number. I'll have to -- I'll have to give you a call back on that. I can't explain why the State's number is different.

Yes. The state releases those on a monthly basis. Louisiana does each property.

Just a clarification, they released the gaming revenue numbers.

Correct.

Are you saying they release the total revenue numbers?

No, just the gaming revenues.

We haven't seen increases in some of the other areas in the [book]. Food and beverage is definitely up. But that seems to [have] a large margin.

Usually, the difference is less than a $1 million between your total revenue and what the state releases for gaming win.

I will look into that.

Okay. Great. Then I will call you after this call. Thanks.

[OPERATOR INSTRUCTIONS]

Our next question comes from the line of [David Barteld[ with [MCPI]. Please proceed with your question.

Good morning, guys. Two questions. One, when you open the Gulf Coast properties, those are going to be permanent casinos, correct?

Let's take them one at a time. In the case of Bay St. Louis, we are going to open in the most part, the existing structure at existing grades. And so, it will be land-based completely, but at existing grades. As we move to a more permanent -- now but in every respect, I should say, it will be wonderful, better than anything we have ever had down there, indistinguishable from a land-based site.

However, the plan is to build still more space that will be elevated, and put a gaming floor that is going to be above the flood levels and so forth. But first order of business is to get up and running and to have a facility that looks permanent in every way. What we've done then is [master] plan beyond that, with the thought that as things evolve, we can do more, take the flood situation into account and that's pretty much the plan there. The Gulf Coast will be back in play and so forth and so on. So that's a much cleaner situation.

For now, we have made a judgment. And I must say, we took a little extra time in Biloxi to sort of think through the problems. We have been assembling properties there and have assembled a significant amount of property away from our current site. And we will continue to do that. But we have made a judgment that given the strength in the market today, that the smartest thing for us to do at least on a temporary basis is to go back to where we were, repair our barge, which just a couple of days ago by the way went away for repair, and pretty much go back in business as we were before. At the same time, we look for, what I'll call a longer-term plan.

So we are committed to the long-term, but recognize that that's going to take a lot more planning, a lot more thinking. And frankly from my own point of view, sort of scratching my head one day, realized that we were better served to get up and running, get revenue growing, people employed again, and then with patience, figure out what the long-term solution is. So, we're creating new options on the Gulf Coast -- in Biloxi, but the short-term plan is to reopen where we were. And we are moving as fast as we can to accomplish that.

Okay. So you'll get back where you were, but with the longer-term opportunity for growth in that market?

Yes, and to develop a land-based facility.

Great.

This is kind of best of all worlds. There's complications, too complicated to go into right now, and to try to figure out what we're going to do down there. And just made the decision, look, let's get up. Let's get running. We have that ability. While, at the same time, we've assembled plenty of ground and the ability to do something different. So it's the best of both worlds. So we'll generate revenue, and we'll now craft the long-term plan, land-based.

Sounds good. Thanks. So hopefully, you could help us out in the fourth quarter all line items jive for the most part with the exception of the tax line. It looks like your tax rate popped up quite a bit. Can you help us out with your guidance for next year's, 39.5 and you're higher in that in the quarter? Can you tell us what was in there, so we can see where we went wrong?

Where you went wrong, well, I'm not sure it's anywhere you went wrong. Clearly, there is issues on true-ups and it relates -- a lot of the items relate to the impact on the transaction relative to Argosy, and items which are deductible for tax, items which are and items which get deferred. Quite candidly, I'll be 100% honest here. We actually retained an outside accounting firm, separate from BDO, to come in and help us with our accrual on taxes, because it is incredibly complex with all of this different moving pieces of what's happened in the quarter.

We are very comfortable though going forward that our tax rate -- there's really more of an aberration in the fourth quarter, resulting from a bunch of moving pieces. Some of it related to the continuing op components or the discontinued op components from Baton Rouge sale, as well as I'm trying to remember what one of the other issues was. But, suffice it to say, it's beyond my scope of experience to be able to explain exactly a whole piece. I can do that on a separate call, if you'd like. [Inaudible] we'll get some people on here that are completely fluent in concepts around tax accruals.

A critical question is, what it would look like --?

39.5.

Okay.

And that's Indiana is raising that--

No, that's what caused the rate to go up, but relative to why -- where we were in the fourth quarter, it's [a] one-time.

Right. We were just trying to normalize that with a number, but it's -- you're saying it is too convoluted to do that.

It's a very complex reconciliation process, I can tell you that. And quite candidly, I mean everybody -- brought in outside people and say, look at it, recognizing that it's really beyond the scope of our internal abilities to get that number perfectly right.

Good enough. Thank you, very much.

Our next question comes from David Anders with Merrill Lynch. Please proceed with your question.

Right. Thank you. Hey, Bill, in 2006, I know you follow -- you said I think to Janet that, fourth quarter depreciation looks good, but is there any accelerated depreciation with the Maine or anything like that that need to be aware of, coming on later in the year?

Maine. Certainly, Maine going forward, what you have there is the depreciation in the fourth quarter is for when we opened up operations based on open date, which was November 4th. And you can take the Maine -- it's not a full quarter for Maine

Okay. So you got to gross it up a little bit. And as far as interest expense for '06, on my [inaudible] numbers, I have your debt going up, by about 100 million year-end to year-end, is that in the ballpark you think? Or, you give me color on the interest expense line item.

I think, it well -- yes, I believe we are actually looking little bit -- we believe it's going to be just slightly north of that, probably in the 125 million to 150 million range.

Okay. Okay. Thank you.

Our next question comes from the line of Harry Curtis with JP Morgan. Please proceed with your question.

Good morning. If you could just touch on the Bay St. Louis market from a demand perspective given that much of the -- much of the housing was wiped out by the hurricane?

Harry, I think that would require a crystal ball that frankly, we don't have. I can tell you that our redevelopment there is crafted to take into account the possibility that the market might be somewhat more limited. That's why we're going to take what we have in an existing structure, bring the hotel back. And keep our spend cautious, and basically phase this project. And then we will have all the facilities and then income, frankly that we had before, in terms of machine count.

But before we get big and fancy and move on to grander plans, we want to let the market down there stabilized. Remember, [Golfports] -- vanished for now and it's going to be a lot farther behind anything that we would do. So while we've lost some prospects, we may have gained some. I think, my judgment is we do what we've planned, we get up, we get open, we see how it is. We've got a long-term plan that goes beyond it. But beyond that, I don't think we know.

Yes. Just to add to that, Harry. I think in the short term we're a little bit clearer on performance in that property once we get it open, which we think is going to be positive. On a longer-term basis, I think a lot of that is going to be dictated by what happens with other properties. As Peter said, Gulfport right now, there is no competition in it. If you recall prior to the hurricane or primary competitor was the Gulfport property, Gulfport Grand actually.

So, I think as we go forward, we are going to be, I think, pretty deliberate in how we move with this. But in the interim, there are a lot of people down there. There is a lot of reconstruction going on. People are trying to get back to their lives. And so on a short-term basis, I think we'll be fine. One of the underlying things that we stressed as a Company for awhile now, is we just trying to make sure we don't overcapitalized the asset.

Thank you.

Our next question comes from a line of [Ari Shavit] with [MD Shavit]. Please proceed with your question.

Thank you. Regarding Maine, see at -- EBITA for a December about 287,000. Is that that normalized run rate for the temporary facility going forward as you see it?

Yes. I think December reflects what we would expect, I mean, clearly depending on what happens with revenues, obviously as revenues move up or down. I think you will find that that number should improve going overtime. Certainly, we are looking at January and February those numbers are nominally coming up, and we would -- hopefully continue to see that trend throughout the remainder of next year.

Okay. Great. And one follow-up question for Charles Town. Should we assume 3,700 slots throughout the year?

4,200.

4,200.

Right.

Weren't 300 taken off for the construction?

They were. We were at 40 -- we temporarily when up to 4,500 machines, and then when we started the construct [inaudible] we pulled out 300, down to 4,200.

Got it. Okay, great. Thanks a lot.

Sure.

We have a follow-up question from the line of Larry Klatzkin of Jeffries & Company. Please proceed with your question.

Hi, guys. Just quickly on Bay St. Louis, is that bridge rebuilt at this point?

No. The answer is no. I mean they are working on it. And I actually sat on the call with the governor -- and he made it clear that, that is a huge priority in Mississippi, to get those bridges open.

All right. So, I mean you're not opening in the year-end, you think that bridge will be opened by the time you open?

No, it won't be. The answer is it won't be. But we would hope within the six months for the time we'd be open, that it would be open.

All right.

Robert Ippolito was there yesterday and felt that --

They started, and their projection is 16 to 18 months?

Okay. So Bay St. Louis may not be able to grab it that much from Gulfport until that bridge is open?

The way we approach it, Larry is that there is just less supply in the marketplace at that point. So whatever is there we should get the bulk of it.

Okay. That makes sense. All right. Thanks.

Okay.

There are no further questions from the phone line.

Well, if that's it then we thank you very much for joining us today. And we look forward to talking with you next quarter.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation, and ask that you please disconnect your lines. Have a good day.